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A group of Barclays small business banking clients have got together with accounting-software company KashFlow to highlight the issue of them being mis-sold accounting packages that they cannot understand or use.

Barclays business banking is being criticised by a growing group of SME owners for mis-selling expensive and inappropriate accounting software such as Sage and Quickbooks.

KashFlow is leading the crusade to help small business owners after being contacted by a number of small businesses that felt helpless.

Barclays customers say that during the business account sign-up process they are being encouraged by the banks business advisers to sign up to pay from £18.00 to £21.00 per month for a 12 month period for accounting software that they later find out is totally unsuitable for their requirements.

It is only when business owners ask to return the software and cancel the direct debit that they are told it is too late and they must continue to pay the amount as they are committed to the full 12 month period.

Michael Gill runs BM Graphics and he has fallen foul of the Barclays business account opening process. Speaking about his situation he said,

“I went to Barclays to open a business account and once the account opening process was almost completed the business manager asked who was going to do my bookkeeping, I replied that at that point I did not know, she then went on to explain the Quickbooks and marketing software. Although the cost was outlined at £18 per month the forms were filled in as part of the account opening process so I thought I had to have it”.

He continued, “I loaded the software onto my computer and realised it was so hard to make head or tail of it. When I realised I could not use it and kept seeing the £18 coming out of the account I rang Barclays Business and spoke to an operator who said that I could cancel it.

I wrote a letter to Barclays and returned the software in the box. 10 days later I received a letter stating that I had signed a Direct Debit for a period of 1 year and therefore I could not cancel and would not take my instruction to cancel the Direct Debit. The software was not returned to me.

Barclays were unhelpful, and full of false promises with regard to their business support, I think they are not really interested in small businesses trying to get off the ground.”

Michael is not in the minority with plenty of other SME owners such as Rachael Philips who runs Kochou, an event management company, having had the same experience.

Rachael said,

“It was explained to me that in order to get my free banking period I needed to have this package but what was not explained, which I later found out, was that the free banking period was 12 months without the package which would’ve suited me perfectly well. I basically took the package out because I wanted ‘free’ banking and because the questionnaire made me think I needed this package.

There were no cancellation options available – or none that were immediately apparent. I left with the package and was stuck with it until I told them I wouldn’t pay and they closed my account”.

The Managing Director of KashFlow has written to John Varley, Barclays Group Chief Executive, asking him to intervene and immediately cease the practice so it can be investigated fully by the bank.

Duane Jackson, KashFlow Managing Director commented,

“Time and time again we are getting customers coming to us saying that they are being forced to pay for software that they just do not want or understand. I’m not criticising the software that’s being sold; they are both very good packages. But they’re not really suited to new start-ups with no accounting training. Businesses should be allowed to try the software for free for a couple of months to see if it’s going to work for them before they are committed to paying for it.”

He continued, “No doubt Barclays is getting a percentage of that direct debit as a reward for selling the software and of course it is their commercial right to do that. But when you’re starting a new business, your bank manager is someone you should be able to trust and look to for guidance. If they recommend a software package to you then you assume they have your best interests at heart. Unfortunately that doesn’t seem to be the case here”.

KashFlow will consider the response from Barclays before deciding if they should take the matter further and to the likes of the Financial Services Authority for a more formal investigation.


Editors Notes:

For further information contact or 07743057458.

-KashFlow has received two rounds of venture capital funding from Lord Young of Graffham, former Secretary of State for Trade & Industry and ex Chairman of Cable and Wireless

- KashFlow has been nominated in the 2007 Software Satisfaction Awards for the category of Web-Hosted Accounts

- KashFlow is simple to employ, with users instinctively knowing where to click to perform almost any accountancy task

- Owner managers are able to effectively manage their accounts with no need for software training or prior knowledge of accountancy

- KashFlow has been featured in the likes of the Financial Times and The Daily Telegraph

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